FEATURED ARTICLES ABOUT MAJOR CARRIERS - PAGE 3

Just as they've pushed up costs at the local service station, rising oil prices are making it more expensive to fly. For the second time in recent weeks other major carriers, including discount king Southwest Airlines, have quickly followed a price hike by Northwest Airlines. "It's related to the rise in the price of fuel," said Kurt Ebenhoch, a spokesman for Eagan, Minn.-based Northwest. The latest increase mirrors one put in place in late February. Ticket prices were increased $5 for one-way trips and $10 for round-trip flights of less than 1,000 miles.

United Airlines joined the fleet of major carriers flying higher Tuesday, reporting its first profitable first quarter in six years. The company credited its performance, in part, to its new employee-ownership structure. The carrier said its parent company, UAL Corp., earned $3 million in the first three months of 1995 after a $24 million gain from the sale of some of its aircraft. On a per share basis, however, the company recorded a loss of $1.05 a share after paying dividends on preferred stock issued through its employee stock ownership plan.

State officials reported progress Wednesday in their long-odds quest to build a third airport in the Chicago area, citing a "letter of interest" in the proposed Peotone site from a budget airline that operates at Midway Airport. Chicago officials played down the significance of the overture by the carrier, Spirit Airlines, saying it had little apparent capital to be considered a serious investor in a new airport. Mark Kahan of Spirit, a Detroit-based carrier that provides service to 12 cities, wrote a letter to Gov. Jim Edgar dated Aug. 13 explaining that the 8-year-old airline has encountered "anti-competitive behavior to drive us out of hub airports dominated by the major carriers."

For a couple of years now, Robert Crandall, the blunt chairman and president of American Airlines, has been warning that his industry is in deep trouble. Losses have been piling up and carriers have been disappearing. In many ways, what's left resembles the auto industry. There are the Big Three carriers with staying power-American, United and Delta-but even they have been hustling for passengers and profits. Unlike some critics, Crandall doesn`t blame deregulation for the industry's woes; he points to cutthroat competition on important routes and an irrational, maze-like fare structure.

Continental Airlines canceled a $10 round-trip fare increase Monday, prompting other carriers that had matched the move to reverse their price hikes. "We rescinded because we need to remain competitive," said Sarah Anthony, spokeswoman for Continental. The decision quickly prompted other major carriers to say they also were re-evaluating decisions to increase ticket prices. Continental's fare hike was put in place Friday, the third increase by major airlines since late February.

For 25 years, Robert Crandall, chairman and chief executive officer of American Airlines, has been synonymous with the nation's aerospace industry. On Wednesday, as Crandall announced he will retire next month, the airline he heads reported sharply higher earnings, shattering Wall Street estimates and setting the stage for a wave of better-than-expected earnings reports by the country's major carriers. For Crandall, Wednesday's Wall Street surprise was a capstone to a career of industry firsts.

Winter is coming, a time when air travel to Europe from the U.S. enters a state of semi-hibernation. In response, the nation's airlines in years past have offered travelers attractive discounts in an effort to fill the empty seats on their trans-Atlantic flights. This year, despite the fact the airlines are drowning in red ink, is no different. On Tuesday, United Airlines and American Airlines, the nation's two largest carriers, followed Continental Airlines` lead by reducing winter fares for European travel by an average of 35 percent.

By Transportation in brief is compiled from the notebooks of Jim Mateja, Rick Popely and Kevin Schweitzer, and from Tribune news services | September 28, 2003

- United Airlines plans to launching a new low-fare carrier based in Denver in February, testing routes in the Southwest and Southeast before expanding service across the country. The new airline, which has not been named, will initially fly to Reno, Nev.; Las Vegas; Phoenix; Ontario, Calif.; New Orleans; and Orlando and Tampa, destinations that attract mostly leisure travelers. Tickets will go on sale in November. United said the new airline will operate 40 Airbus A320 jets, each seating 156 passengers.

British Airways PLC and KLM Royal Dutch Airlines broke off talks about a long-planned merger Thursday, blaming intractable commercial and regulatory issues. The collapse is a major setback for both companies, which have struggled to find their place amid the consolidation of Europe's airline industry. Experts said it dampens hopes for cross-border mergers among major carriers. "We always recognized that this would be a complex transaction, involving not only commercial and economic issues, but also aero-political, regulatory and other matters.

Conventional wisdom says one-way tickets are the worst deal ever. Traditionally pricey, they also have a reputation for triggering extra scrutiny at security checkpoints. But in recent weeks, prices for one-way tickets have been falling sharply--and despite the slump in overall airline traffic, travelers are snapping them up. Orbitz says one-way sales increased 3 percent last month. LastMinuteTravel.com says sales have risen by "double digits" since mid-March, when the hostilities in Iraq became imminent.